IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i4p1085-d207193.html
   My bibliography  Save this article

Utilities: Innovation and Sustainability

Author

Listed:
  • Enrique Loredo

    (Jovellanos Faculty of Commerce, Tourism and Social Sciences, University of Oviedo, C/Luis Moya Blanco 261, 33203 Gijón, Spain
    Department of Business Administration, University of Oviedo, 33006 Oviedo, Spain)

  • Nuria Lopez-Mielgo

    (Department of Business Administration, University of Oviedo, 33006 Oviedo, Spain)

  • Gustavo Pineiro-Villaverde

    (Doctoral Program in Economic Analysis and Business, Faculty of Economics and Business, University of A Coruna, 15071 A Coruna, Spain)

  • María Teresa García-Álvarez

    (Department of Business, University of A Coruna, 15071 A Coruna, Spain)

Abstract

Pro-market reforms have disrupted the playing field and strongly affected the innovative behavior of electricity, gas and water utilities. Beyond a significant reduction in sectoral R&D investments, very little is known about how these firms accomplish their innovation strategies in this new scenario. Given this gap in the literature, the first aim of this paper is to identify the internal determinants of both the product and process innovation of utilities in a liberalized environment. Additionally, there is another external force that is also disrupting the specific landscape of utilities: the sustainability challenge. Therefore, the second aim of this paper is establishing whether sustainability-orientation is a driver of innovation in the utilities industries. The empirical study is carried out on a panel of 82 Spanish electricity, gas and water utilities over the period 2005–2012 (Technological Innovation Panel dataset (PITEC)). The main findings are: (i) the acquisition of disembodied knowledge does not play a relevant role for utilities; (ii) non-formal search processes are central to product innovation; (iii) some markets for technology –external R&D and technology embedded in equipment—are determinant factors for process innovation; (iv) sustainability orientation increases the likelihood of generating both, product and process innovations. These firm-level results are novel contributions to the field of utility management.

Suggested Citation

  • Enrique Loredo & Nuria Lopez-Mielgo & Gustavo Pineiro-Villaverde & María Teresa García-Álvarez, 2019. "Utilities: Innovation and Sustainability," Sustainability, MDPI, vol. 11(4), pages 1-13, February.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:4:p:1085-:d:207193
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/4/1085/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/4/1085/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jamasb, Tooraj & Pollitt, Michael G., 2011. "Electricity sector liberalisation and innovation: An analysis of the UK's patenting activities," Research Policy, Elsevier, vol. 40(2), pages 309-324, March.
    2. Pellegrino, Gabriele & Savona, Maria, 2013. "Is money all? Financing versus knowledge and demand constraints to innovation," MERIT Working Papers 029, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Markard, Jochen & Truffer, Bernhard, 2006. "Innovation processes in large technical systems: Market liberalization as a driver for radical change?," Research Policy, Elsevier, vol. 35(5), pages 609-625, June.
    4. Pierre Blanchard & Jean-Pierre Huiban & Antonio Musolesi & Patrick Sevestre, 2013. "Where there is a will, there is a way? Assessing the impact of obstacles to innovation," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(3), pages 679-710, June.
    5. Jochen Markard & Bernhard Truffer & Dieter M. Imboden, 2004. "The Impacts of Market Liberalization on Innovation Processes in the Electricity Sector," Energy & Environment, , vol. 15(2), pages 201-214, March.
    6. Mairesse, Jacques & Mohnen, Pierre, 2010. "Using Innovation Surveys for Econometric Analysis," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1129-1155, Elsevier.
    7. Costa-Campi, M.T. & Duch-Brown, N. & García-Quevedo, J., 2014. "R&D drivers and obstacles to innovation in the energy industry," Energy Economics, Elsevier, vol. 46(C), pages 20-30.
    8. Dooley, J J, 1998. "Unintended consequences: energy R&D in a deregulated energy market," Energy Policy, Elsevier, vol. 26(7), pages 547-555, June.
    9. Nemet, Gregory F. & Kammen, Daniel M., 2007. "U.S. energy research and development: Declining investment, increasing need, and the feasibility of expansion," Energy Policy, Elsevier, vol. 35(1), pages 746-755, January.
    10. Jamasb, Tooraj & Pollitt, Michael G., 2015. "Why and how to subsidise energy R+D: Lessons from the collapse and recovery of electricity innovation in the UK," Energy Policy, Elsevier, vol. 83(C), pages 197-205.
    11. Sagar, A. D. & Holdren, J. P., 2002. "Assessing the global energy innovation system: some key issues," Energy Policy, Elsevier, vol. 30(6), pages 465-469, May.
    12. Maria Luisa Mancusi & Andrea Vezzulli, 2010. "R&D, Innovation and Liquidity Constraints," KITeS Working Papers 030, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised May 2010.
    13. Green, Jemma & Newman, Peter, 2017. "Citizen utilities: The emerging power paradigm," Energy Policy, Elsevier, vol. 105(C), pages 283-293.
    14. Jaider Vega-Jurado & Antonio Gutiérrez-Gracia & Ignacio Fernández-de-Lucio, 2009. "Does external knowledge sourcing matter for innovation? Evidence from the Spanish manufacturing industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 18(4), pages 637-670, August.
    15. Sterlacchini, Alessandro, 2012. "Energy R&D in private and state-owned utilities: An analysis of the major world electric companies," Energy Policy, Elsevier, vol. 41(C), pages 494-506.
    16. D’Este, Pablo & Iammarino, Simona & Savona, Maria & von Tunzelmann, Nick, 2012. "What hampers innovation? Revealed barriers versus deterring barriers," Research Policy, Elsevier, vol. 41(2), pages 482-488.
    17. Frederique Savignac, 2008. "Impact Of Financial Constraints On Innovation: What Can Be Learned From A Direct Measure?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 17(6), pages 553-569.
    18. Kim, Jihwan & Kim, Yeonbae & Flacher, David, 2012. "R&D investment of electricity-generating firms following industry restructuring," Energy Policy, Elsevier, vol. 48(C), pages 103-117.
    19. Munari, Federico & Roberts, Edward B. & Sobrero, Maurizio, 2002. "Privatization processes and the redefinition of corporate R&D boundaries," Research Policy, Elsevier, vol. 31(1), pages 31-53, January.
    20. Paroma Sanyal & Linda R. Cohen, 2009. "Powering Progress: Restructuring, Competition, and R&D in the U.S. Electric Utility Industry," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 41-80.
    21. Sagar, Ambuj D. & van der Zwaan, Bob, 2006. "Technological innovation in the energy sector: R&D, deployment, and learning-by-doing," Energy Policy, Elsevier, vol. 34(17), pages 2601-2608, November.
    22. Pellegrino, Gabriele & Savona, Maria, 2013. "Is money all? Financing versus knowledge and demand constraints to innovation," MERIT Working Papers 2013-029, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    23. Veugelers, Reinhilde, 1997. "Internal R & D expenditures and external technology sourcing," Research Policy, Elsevier, vol. 26(3), pages 303-315, October.
    24. Tuballa, Maria Lorena & Abundo, Michael Lochinvar, 2016. "A review of the development of Smart Grid technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 710-725.
    25. Jamasb, Tooraj & Pollitt, Michael, 2008. "Liberalisation and R&D in network industries: The case of the electricity industry," Research Policy, Elsevier, vol. 37(6-7), pages 995-1008, July.
    26. Markard, Jochen & Raven, Rob & Truffer, Bernhard, 2012. "Sustainability transitions: An emerging field of research and its prospects," Research Policy, Elsevier, vol. 41(6), pages 955-967.
    27. Bruno Cassiman & Reinhilde Veugelers, 2006. "In Search of Complementarity in Innovation Strategy: Internal R& D and External Knowledge Acquisition," Management Science, INFORMS, vol. 52(1), pages 68-82, January.
    28. Kaenzig, Josef & Heinzle, Stefanie Lena & Wüstenhagen, Rolf, 2013. "Whatever the customer wants, the customer gets? Exploring the gap between consumer preferences and default electricity products in Germany," Energy Policy, Elsevier, vol. 53(C), pages 311-322.
    29. Ines Suarez-Perales & Concepción Garces-Ayerbe & Pilar Rivera-Torres & Cristina Suarez-Galvez, 2017. "Is Strategic Proactivity a Driver of an Environmental Strategy? Effects of Innovation and Internationalization Leadership," Sustainability, MDPI, vol. 9(10), pages 1-13, October.
    30. Rajan Varadarajan, 2017. "Innovating for sustainability: a framework for sustainable innovations and a model of sustainable innovations orientation," Journal of the Academy of Marketing Science, Springer, vol. 45(1), pages 14-36, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Renji Sun & Kung-Cheng Ho & Yan Gu & Chang-Chih Chen, 2019. "Asymmetric Cost Behavior and Investment in R&D: Evidence from China’s Manufacturing Listed Companies," Sustainability, MDPI, vol. 11(6), pages 1-15, March.
    2. Alberto Melane-Lavado & Agustín Álvarez-Herranz, 2020. "Cooperation Networks as a Driver of Sustainability-Oriented Innovation," Sustainability, MDPI, vol. 12(7), pages 1-26, April.
    3. Yixin Chen & Junrui Zhang, 2019. "The Interdependence of Debt and Innovation Sustainability: Evidence from the Onset of Credit Default Swaps," Sustainability, MDPI, vol. 11(10), pages 1-24, May.
    4. Annesi, Nora & Battaglia, Massimo & Sganzetta, Lorenza, 2023. "Mutual benefits of sustainability integration in the value chain: Responsible innovation by public utilities," Utilities Policy, Elsevier, vol. 82(C).
    5. Yuanyuan Hu & Xiaoping Zhao & Yang Chen, 2019. "The Influence of Managerial Mindfulness on Innovation: Evidence from China," Sustainability, MDPI, vol. 11(10), pages 1-20, May.
    6. Hafiz Muhammad Usman Khizar & Muhammad Jawad Iqbal & Muhammad Imran Rasheed, 2021. "Business orientation and sustainable development: A systematic review of sustainability orientation literature and future research avenues," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(5), pages 1001-1017, September.
    7. Yueping Du & Huanhuan Wang, 2022. "Green Innovation Sustainability: How Green Market Orientation and Absorptive Capacity Matter?," Sustainability, MDPI, vol. 14(13), pages 1-20, July.
    8. Sunyoung Park, 2019. "Identification of Overall Innovation Behavior by Using a Decision Tree: The Case of a Korean Manufacturer," Sustainability, MDPI, vol. 11(22), pages 1-54, November.
    9. Francesca Michelino & Antonello Cammarano & Andrea Celone & Mauro Caputo, 2019. "The Linkage between Sustainability and Innovation Performance in IT Hardware Sector," Sustainability, MDPI, vol. 11(16), pages 1-15, August.
    10. Lingyan Meng & Md Qamruzzaman & Anass Hamad Elneel Adow, 2021. "Technological Adaption and Open Innovation in SMEs: An Strategic Assessment for Women-Owned SMEs Sustainability in Bangladesh," Sustainability, MDPI, vol. 13(5), pages 1-22, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. María Teresa Costa‐Campi & Néstor Duch‐Brown & José García‐Quevedo, 2019. "Innovation strategies of energy firms," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(5), pages 1073-1085, September.
    2. Costa-Campi, M.T. & Duch-Brown, N. & García-Quevedo, J., 2014. "R&D drivers and obstacles to innovation in the energy industry," Energy Economics, Elsevier, vol. 46(C), pages 20-30.
    3. Costa-Campi, M.T. & Duch-Brown, N. & García-Quevedo, J., 2014. "R&D drivers and obstacles to innovation in the energy industry," Energy Economics, Elsevier, vol. 46(C), pages 20-30.
    4. Wang, Nan & Mogi, Gento, 2017. "Deregulation, market competition, and innovation of utilities: Evidence from Japanese electric sector," Energy Policy, Elsevier, vol. 111(C), pages 403-413.
    5. Nesta, Lionel & Vona, Francesco & Nicolli, Francesco, 2014. "Environmental policies, competition and innovation in renewable energy," Journal of Environmental Economics and Management, Elsevier, vol. 67(3), pages 396-411.
    6. Sköld, David & Fornstedt, Helena & Lindahl, Marcus, 2018. "Dilution of innovation utility, reinforcing the reluctance towards the new: An upstream supplier perspective on a fragmented electricity industry," Energy Policy, Elsevier, vol. 116(C), pages 220-231.
    7. Inglesi-Lotz, R., 2019. "Energy research and R&D indicators: An LMDI decomposition analysis for the IEA Big 5 in energy research," Energy Policy, Elsevier, vol. 133(C).
    8. Pinget, Amandine, 2016. "Spécificités des déterminants des innovations environnementales : une approche appliquée aux PME [Specificities of determinants for environmental innovation : an approach applied to SMEs]," MPRA Paper 80108, University Library of Munich, Germany.
    9. Jamasb, Tooraj & Pollitt, Michael G., 2015. "Why and how to subsidise energy R+D: Lessons from the collapse and recovery of electricity innovation in the UK," Energy Policy, Elsevier, vol. 83(C), pages 197-205.
    10. Nesta, Lionel & Vona, Francesco & Nicolli, Francesco, 2014. "Environmental policies, competition and innovation in renewable energy," Journal of Environmental Economics and Management, Elsevier, vol. 67(3), pages 396-411.
    11. repec:hal:spmain:info:hdl:2441/f6h8764enu2lskk9p4oq2cqb0 is not listed on IDEAS
    12. José García-Quevedo & Gabriele Pellegrino & Maria Savona, 2017. "Reviving demand-pull perspectives: The effect of demand uncertainty and stagnancy on R&D strategy," Cambridge Journal of Economics, Oxford University Press, vol. 41(4), pages 1087-1122.
    13. Sterlacchini, Alessandro, 2012. "Energy R&D in private and state-owned utilities: An analysis of the major world electric companies," Energy Policy, Elsevier, vol. 41(C), pages 494-506.
    14. Davide Antonioli & Alberto Marzucchi & Maria Savona, 2017. "Pain shared, pain halved? Cooperation as a coping strategy for innovation barriers," The Journal of Technology Transfer, Springer, vol. 42(4), pages 841-864, August.
    15. Giovanni Marin & Alberto Marzucchi & Roberto Zoboli, 2014. "SMEs and Barriers to Eco-Innovation in EU: A Diverse Palette of Greens," SEEDS Working Papers 0614, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Apr 2014.
    16. José García-Quevedo & Gabriele Pellegrino & Maria Savona, 2017. "Reviving demand-pull perspectives: The effect of demand uncertainty and stagnancy on R&D strategy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(4), pages 1087-1122.
    17. Schmitt, Stephan & Kucsera, Denes, 2013. "The Impact of the Regulatory Reform Process on R&D Investment of European Electricity Utilities," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80035, Verein für Socialpolitik / German Economic Association.
    18. María Teresa Costa-Campi & Jose García-Quevedo, 2017. "Why do manufacturing industries invest in energy R&D?," Working Papers 2017/20, Institut d'Economia de Barcelona (IEB).
    19. Levan Bzhalava & Uwe Cantner, 2018. "The journey towards open innovation: why do firms choose different routes?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(3), pages 245-265, September.
    20. Giovanni Marin & Alberto Marzucchi & Roberto Zoboli, 2015. "SMEs and barriers to Eco-innovation in the EU: exploring different firm profiles," Journal of Evolutionary Economics, Springer, vol. 25(3), pages 671-705, July.
    21. Inkyoung Sun & So Young Kim, 2017. "Energy R&D towards Sustainability: A Panel Analysis of Government Budget for Energy R&D in OECD Countries (1974–2012)," Sustainability, MDPI, vol. 9(4), pages 1-18, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:4:p:1085-:d:207193. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.